municipalbonds,government
bonds,asset-backedsecurities,
andotherformsofcredit
friction,improvessystemicrisk.Consumers
canusereputationtoaccessloansfrom
peers;significantfortheworld’sunbanked
andforentrepreneurs
governmentfinance),microlending,
crowdfunding,regulators,creditrating
agencies,creditscoresoftware
companies
5.ExchangingValue—
speculating,hedging,and
arbitraging.Matchingorders,
clearingtrades,collateral
managementandvaluation,
settlementandcustody
Blockchaintakessettlementtimesonall
transactionsfromdaysandweekstominutes
andseconds.Thisspeedandefficiencyalso
createsopportunitiesforunbankedand
underbankedtoparticipateinwealth
creation
Investment,wholesalebanking,foreign
exchangetraders,hedgefunds,pension
funds,retailbrokerage,clearinghouses,
stock,futures,commoditiesexchanges;
commoditiesbrokerages,centralbanks,
regulators
6.FundingandInvestinginan
Asset,Company,Start-up—
capitalappreciation,dividends,
interest,rents,orsome
combination
Newmodelsforpeer-to-peerfinancing,
recordingofcorporateactionssuchas
dividendspaidautomaticallythroughsmart
contracts.Titlesregistrytoautomateclaims
torentalincomeandotherformsofyield
Investmentbanking,venturecapital,
legal,audit,propertymanagement,
stockexchanges,crowdfunding,
regulators
7.InsuringValueandManaging
Risk—protectassets,homes,
lives,health,businessproperty,
andbusinesspractices,derivative
products
Usingreputationalsystems,insurerswill
betterestimateactuarialrisk,creating
decentralizedmarketsforinsurance.More
transparentderivatives
Insurance,riskmanagement,wholesale
banking,brokerage,clearinghouses,
regulators
8.AccountingforValue—new
corporategovernance
Distributedledgerwillmakeauditand
financialreportingrealtime,responsive,and
transparent,willdramaticallyimprove
capacityofregulatorstoscrutinizefinancial
actionswithinacorporation
Audit,assetmanagement,shareholder
watchdogs,regulators
blockchainwouldtransformherbusinessastheInternettransformedother
industries:“Iwouldtakeitaboutasseriouslyasyoushouldhavetakenthe
conceptoftheInternetinthe1990s.It’sabigdealanditisgoingtochangethe
wayourfinancialworldoperates.”
18
Mastershaddismissedmanyoftheearlytalesofbitcoin,exploitedbydrug
dealers,harnessedbygamblers,andhailedbylibertariansascreatinganew
worldorder.Thatchangedinlate2014.Masterstoldus,“Ihadan‘ahamoment’
whereIbegantoappreciatethepotentialimplicationsofthetechnologyforthe
worldthatIknewwell.Whilstthecryptocurrencyapplicationofthedistributed
ledgerstechnologywasinterestingandhadimplicationsforpayments,the
underlyingdatabasetechnologyitselfhadfarbroaderimplications.”
19
According
toMasters,blockchaincouldreduceinefficienciesandcosts“byallowing
multiplepartiestorelyonthesameinformationratherthanduplicatingand
replicatingitandhavingtoreconcileit.”Asamechanismforshared,
decentralized,replicatedtransactionrecords,blockchainisthe“goldensource,”
shesays.
20
“Bearinmindthatfinancialservicesinfrastructureshavenotevolvedin
decades.Thefrontendhasevolvedbutnotthebackend,”saysMasters.“It’s